GE off, but it isn't NBC's fault
Lending arm is the main culprit for earnings downgradeDon't blame NBC Universal, but parent General Electric won't earn nearly as much money this year as once thought, nor will the company buy back as much stock.
That double dose of bad news delivered Thursday, though, didn't hurt GE shares. The stock enjoyed a powerful 4.4% rally, notching one of its strongest one-day gains this year.
Investors looked beyond the earnings warning and focused on what CEO Jeff Immelt had to say during an interview on the company's CNBC network.
Immelt noted that the stock has been hammered this year -- off 28% -- but that it pays "an airtight 5% dividend."
He touted the healthy dividend in response to anchor David Faber's concerns on behalf of CNBC employees whose retirements and portions of their wealth might be tied to GE stock.
"Tell us something that we can grab a hold of here that will make us all feel good as we watch our net worth decline over the last year," Faber said.
GE cut its earnings from $2.30 per share to $2.10 this year. The culprit -- no surprise given the state of the financial and credit markets -- was GE Capital, which is now estimated to bring in $2 billion this year, down from a previous estimate of $2.8 billion.
As for NBC Universal, Immelt called it a "great media franchise."
During a conference call with Wall Street analysts, Immelt was asked three times if he would spin off GE Capital, prompting him to quip later on CNBC: "At least it took over from, 'Are we going to spin out NBC?' "
The answer to both questions, apparently, is no.